Bridgepoint may relocate local jobs after ruling

Numbers unknown, but some transfers appear likely after accreditation denial

Bridgepoint Education soon may face tough decisions regarding its San Diego work force after its Ashford University arm failed to win accreditation on Monday from a regional college certification agency.

The fast-growing, for-profit education company must address shortfalls in its scholastic programs pinpointed by Western Association of Schools and Colleges, or WASC, analysts and education experts said. At the same time, it must juggle its business operation quickly to save its current accreditation — possibly relocating an unknown number of jobs out of San Diego in the process.

“We believe numerous and potentially expensive changes will need to occur before WASC accredits Bridgepoint, and it could take several years,” said Brandon Dobell, an analyst with William Blair & Co. in Chicago.

Maintaining accreditation is critical for Bridgepoint, since it is a precondition to participating in federal financial aid programs, including Pell Grants and government-backed student loans. The company received more than 85 percent of its $933 million in revenue from federal student aid programs last year.

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Bridgepoint operates two colleges — Ashford University in Clinton, Iowa, and University of the Rockies in Colorado Springs. A vast majority of students are enrolled at Ashford.

In rejecting Ashford University’s accreditation, WASC cited unacceptable dropout rates; too little spending on education and too much spending on marketing; inadequate levels of full-time faculty; concerns of the rigor of course work; untested systems for evaluating programs and student progress; and lack of independence between Ashford’s board and Bridgepoint.

“We view these shortcomings as more than just procedural and as fundamental issues that will take considerable effort to remediate,” Peter Appert, an analyst with Piper Jaffray & Co., said in a research report.

Bridgepoint declined to answer a list of emailed questions. But the company did issue a statement stressing that it is working with regional college accreditation groups.

“Ashford University is currently accredited, and in good standing, with the Higher Learning Commission of the North Central Association of Schools and Colleges (HLC) through 2014-2015, at which time it will participate in another comprehensive evaluation to maintain accreditation,” the company said. “Ashford University is working collaboratively with both WASC and HLC to ensure it continues to satisfy HLC’s accreditation requirements while it seeks initial accreditation with WASC.”

In the past Bridgepoint has defended its recruiting practices, saying it does not use telemarketing. It also has said its retention and graduation rates compare favorably with colleges that attract the same types of students. Ashford’s dropout and retention rates are similar to those of community colleges.

Ashford has a graduation rate of 22 percent. That compares with 85 percent at the University of California San Diego, 66 percent at San Diego State, 12 percent at the University of Phoenix and 15 percent at San Diego City College.

Bridgepoint and other for-profit colleges have been growing fast as workers laid off during the recession try to gain new skills to re-enter the work force. Ashford University has less than 1,000 students taking classes at the Iowa campus and about 85,000 enrolled in online courses, which are run mostly out of San Diego.